Large CPG Marketers Shifting to Digital

Marketers who are promoting branded packaged foods have been feeling pinched ever since the recession started. Some consumers have been migrating to less-​expensive private label products.CPGshopper  Other consumers are spending more money on fresh products and local or regional brands. According to an Advertising Age write-​up that covered the industry’s recent Consumer Analyst Group meeting, these marketers are  realizing they need a fresh product development approach and increased investment in digital media.

Consumers are changing the way they think about and buy food. Only a decade ago, a heavy coupon campaign to accompany the launch of a new food product or product extension, along with TV spots, was enough to win sales. Food marketers often competed on the basis of how many new products they turned out each year. Going forward, big food companies say they’ll be  developing fewer products and they’ll be putting fewer ingredients in each product. These products are more likely to appeal to today’s health conscious consumers, especially savvy moms who spend a lot of time discussing what they don't like about processed food on social media.

Food marketers have also been squeezed by the higher cost of ingredients and the very real limit on prices that consumers have set as a result of tight household budgets. While marketers are looking for operational efficiencies, they’re intent on spending more on digital advertising.  The Oreo and Trident brands, part of Mondelez, will spend 50% of their U.S. media budget on digital by 2016. Kraft plans to continue its foray into digital, noting that it has been able to substantially reduce advertising costs while yielding the same level of impressions. And, other marketers, such as ConAgra, believe in-​store marketing efforts are most important in terms of driving sales for retailers and manufacturers.

To learn more about specific food buying audiences, such as in-​store promotion responders,  check out the AudienceSCAN report available on the Research Store at ad​-ology​.com.

Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-​owner of several small businesses in the health care services sector.